Corrections have been made in relation to chain volume measures that are discussed in the Main Features (in the 'Summary' tab). That is, where income and expenditure are discussed in adjusted terms, or adjusted for price changes. Income and expenditure estimates from 2000-01 to 2003-04 were deflated instead of inflated in relation to the base year of 2004-05, while the 2005-06 estimates were inflated instead of deflated.

NOTES

ABOUT THIS PUBLICATION

This publication presents details from the 2005–06 national census of private hospitals. Three categories of hospitals are identified: acute hospitals, psychiatric hospitals and free-standing day hospital facilities.

There are relatively few psychiatric hospitals and some of these are owned by the same parent company. To maintain the confidentiality of their data, psychiatric hospitals are combined with acute hospitals in most tables in this publication. Any differences between the data presented in this publication and the data shown in other reports on private hospital activity are due to differences in scope and coverage, relative completeness of the data sources and differing error resolution procedures.

CHANGES TO THIS ISSUE
This issue now includes a publication and spreadsheets. The 44 tables in the spreadsheets were previously available in two separate products (now discontinued). These were:

For further information about these and related statistics, contact the National Information and Referral Service on 1300 135 070 or client.services@abs.gov.au.

ALL HOSPITALS COMMENTARY

INTRODUCTION

This publication presents data for the private hospital sector in 2005–06. Comparable data for public hospitals are available in Australian Hospital Statistics 2005–06, produced by the Australian Institute of Health and Welfare (AIHW).

HOSPITALS

There were 547 private hospitals operating in Australia in 2005–06 compared with 532 in 2004–05. This represents an overall increase of 2.8% in the total number of private hospitals, reflecting increases in free standing day hospitals (3.6%) and acute and psychiatric hospitals (2.1%). The number of available beds and chairs decreased 0.7% from 26,424 in 2004–05 to 26,227 in 2005–06, due to the decline of 1.0% in the number of beds and chairs in acute and psychiatric hospitals. Total patient separations increased by 5.4% (2.8m in 2004–05 to 2.9m in 2005–06). Private hospitals provided 7.5m days of hospitalisation to patients in 2005–06, up 1.9% on 2004–05. Staff numbers increased by 3.0% to 50,001 people (full-time equivalent).

PATIENT CHARACTERISTICS

Sex and Age

In 2005–06, the demographic profile of private hospital patients has changed very little from the previous year with females accounting for 55% of all patient separations, and people aged 65 and over accounting for 36% of all patient separations. Overall, there were 156.2 patient separations per 1,000 population for females and 129.6 patient separations per 1,000 population for males.

Insurance

The proportion of patient separations reported as being covered by hospital insurance increased for all private hospitals. In 2005–06, 79% of patient separations reported having hospital insurance compared with 78% in 2004–05. Patient separations reported as being covered by hospital insurance in private acute and psychiatric hospitals increased by 1.3% over the year, while for free-standing day hospitals there was a slight increase of 0.7%.

All Private Hospitals, Hospital insurance (a)

Procedures performed

The total number of procedures increased by 5.9% from 6.2 million in 2004–05 to 6.5 million in 2005–06. Of these procedures, 5.3 million were performed in acute and psychiatric hospitals and the remainder in free-standing day hospitals. The greatest proportion of procedures were non-invasive, cognitive and interventions nec (45%) followed by procedures on the digestive system (12%).

Examples of non-invasive and cognitive interventions are services such as dietary education and exercise therapy (often used for development of treatment plans, programs, case reviews or follow up to previous procedures performed). For further details of the classification refer to Volume 3 International Statistical Classification of Diseases and Related Health Problems, 10th Revision-Australian Modification (ICD-10-AM).

Similar patterns were reflected in both the acute and psychiatric and free-standing day hospitals.

For acute and psychiatric hospitals, non-invasive, cognitive and interventions nec accounted for 47% of all procedures performed in 2005–06, up from 46% in the previous year. The next most common procedures in acute and psychiatric hospitals were on the digestive system (10%), the musculoskeletal system (6.6%) and dental services (4.8%).

For free-standing day hospitals, non-invasive, cognitive and interventions nec accounted for the highest proportion of all procedures performed on patients in 2005–06 at 39%. This is followed by procedures on the digestive system (22%), the eye and adnexa (8.2%) and dermatological and plastic procedures (7.6%).

The most common principle diagnosis for patient separations from all private hospitals was factors influencing health status and contact with health services (21%). This relates to occasions when circumstances other than a disease, injury or external cause are recorded as 'diagnoses' or 'problems' (see Glossary). The second most common principle diagnosis for patient separations was diseases of the digestive system (16%). Similarly in 2004–05, factors influencing health status and contact with health services represented 21% of patient separations and diseases of the digestive system represented 16% of patient separations.

Mode of Separation

The majority (97%) of all patients were discharged to their place of usual residence in 2005–06. Patient separations discharged to usual residence increased by 4.1% for private acute and psychiatric hospitals and 8.0% for free-standing day hospitals since 2004–05. For private acute and psychiatric hospitals, Queensland recorded the greatest increase (7.8%) followed by New South Wales (4.6%). These changes can be attributed to the overall increase in patient separations.

The number of patients discharged from a private acute and psychiatric hospital to other hospitals increased by 7.1% from 2004-05 to 2005–06. Queensland and South Australia increased transfers to other hospitals by 16% and 7.0% respectively.

INCOME & EXPENDITURE

Patient activity continued to grow with total income generated totalling $7,001.1m in 2005–06, up from $6,624.1m in 2004–05. Total income from private acute and psychiatric hospitals was $6,591.1m which accounted for 94% of all private hospital income.

Total recurrent expenditure for all private hospitals increased by 5.8% to $6,497.9m in 2005–06 from $6,144.1m in 2004–05. For private acute and psychiatric hospitals, the proportion of wages and salaries attributed to recurrent expenses remained almost steady at 52% in 2005-06, and for free-standing day hospitals was consistent with 2004-05 at 39%.

The private hospital sector invested $387.4m in building and other capital assets in 2005–06, with private acute and psychiatric hospitals increasing investment from $309.3m in 2004–05 to $370.1m in 2005–06. Free-standing day hospitals decreased investment from $22.4m in 2004–05 to $17.2m in 2005–06.

NET OPERATING MARGIN

Net operating margin is derived by subtracting recurrent expenditure from income and expressing the result as a proportion of income. The net operating margin for acute and psychiatric hospitals during 2005–06 was 6.5%, down slightly from 6.6% in 2004-05. The net operating margin for free-standing day hospital facilities was much higher at 18%, which was lower than the previous year's percentage of 19%.

All Private Hospitals, Net Operating Margin

ACCREDITATION

Hospital accreditation has been identified as an indicator of capability within the National Health Performance Framework (for further information refer to Australian Hospitals 2005–06, produced by Australian Institute of Health and Welfare (AIHW).

As at the 30 June 2006, the main organisations used by hospitals to obtain accreditation were Australian Council on Healthcare Standards (ACHS) (used by 380 hospitals) and Benchmark Certification (used by 60 hospitals).

ACUTE AND PSYCHIATRIC HOSPITALS COMMENTARY

HOSPITALS

The number of private acute and psychiatric hospitals increased in 2005–06 to 291, up by 6 hospitals or 2.1% compared to 2004–05 (285).

BEDS
The average number of beds available in acute and psychiatric hospitals during 2005–06 was 24,113, 1% lower than in 2004–05. This was largely due to a decline in the average number of beds available in the capital cities where average bed numbers decreased by 1.3% over the 12 months to 2005-06. In regional Australia, average bed numbers decreased very slightly.

Capital City Statistical Divisions accounted for 73% of all available beds in private acute and psychiatric hospitals in Australia, while 63% of Australia's population lived in these areas. (See Explanatory Notes, paragraph 19, concerning population estimates.)

The occupancy rate in private acute and psychiatric hospitals was 78%, compared with 77% in 2004–05. The bed occupancy rate was highest for Queensland 84%. The lowest was for Tasmania, Northern Territory and Australian Capital Territory combined (74%). The occupancy rate was higher in hospitals located in the Capital City Statistical Divisions (81%), compared with 71% in the rest of Australia.

Private acute and psychiatric hospitals operated by religious or charitable institutions provided 40% of the available beds during 2005–06. When compared with for profit acute and psychiatric hospitals, a higher proportion of those operated by religious or charitable institutions had an average of more than 50 beds available, 69% compared with 58%. Although there were fewer religious or charitable hospitals, they accounted for 57% of all private acute and psychiatric hospitals with more than 200 beds.

PATIENT SEPARATIONS
In 2005–06, there were 2.3 million patient separations from private acute and psychiatric hospitals. Total patient separations in these hospitals for 2005–06 increased by 4.8% compared with an increase in the previous year of 2.6%. The average annual growth rate of patient separations for the last five years was 3.7%. Among the States and Territories, patient separations increased over the year in Queensland (8.1%), New South Wales and Western Australia both (4.6%), Victoria (3.8%) and South Australia (3.1%). For Tasmania, Northern Territory and the Australian Capital Territory combined there was a decrease in patient separations from 2004–05 of 2.2%.

Same day patient separations from private acute and psychiatric hospitals accounted for 54% of all patient separations (1.3 million) in 2005–06 with 1.1 million separations relating to overnight stays.

PATIENT DAYS AND AVERAGE LENGTH OF STAY IN HOSPITAL
During 2005–06, 6.9 million patient days were provided in private acute and psychiatric hospitals, up by 1.4% from 2004–05. Patient days increased in Western Australia (4.2%), Queensland (2.6%), Victoria (1.4%) and South Australia (1%). Tasmania, Northern Territory and Australian Capital Territory combined were down 3.7% over the 2005–06 year.

The average length of stay for all patients (same-day and overnight-stay) in private acute and psychiatric hospitals, dropped slightly to 2.9 days in 2005–06 from 3 days in 2004-05. The average length of stay has been declining since 1995–96 (4 days).

For overnight-stay patients only, the average length of stay declined to 5.2 days in 2005–06 compared with 5.4 days in 2004-05.

PATIENT CHARACTERISTICS

Insurance status

During 2005–06, 83% of patient separations from private acute and psychiatric hospitals carried hospital insurance. The proportion of patient separations with hospital insurance was highest in South Australia (89%) and lowest in Tasmania, Northern Territory and Australian Capital Territory combined (63%).

HOSPITAL CHARACTERISTICS
In 2005–06, there were 192 private acute and psychiatric hospitals with operating theatres. In these hospitals there was a total of 839 operating theatres, 30% are located in NSW, 24% in Victoria, and 22% in Queensland.

The average number of sessions per operating theatre per week was highest in Western Australia (8.4) compared with the average for Australia (7.3). Queensland (6.3) had the lowest average number of sessions per operating theatre per week during 2005–06.

There were 168 dedicated day surgery units in private acute and psychiatric hospitals in 2005–06. Of these 70% are located in New South Wales (28), Victoria (47) and Queensland (43). Per theatre per week, the average theatre time used in day surgery theatres (18.1 hours) was 61% less than the average theatre time used in operating theatres (46.4 hours).

Over 2005–06 there were 1.7 million occasions of service in non-admitted patients services in Private Hospitals in Australia. Of these the major non-admitted patient services were accident and emergency (423,300 occasions of service), pathology (351,700) and allied health services (320,500). In 2005–06, there were 43 private hospitals in Australia with accident and emergency services. Among the states, Victoria (15) had the largest number of private hospitals with accident and emergency services, followed closely by Queensland (11).

STAFF

The number of full-time equivalent staff employed at private acute and psychiatric hospitals in Australia during 2005–06 was 47,770, an increase of 2.8% over the previous year. Nursing staff (30,212) accounted for 63% of total staff, and averaged 1.6 per occupied bed in 2005–06. South Australia and Western Australia had the same ratio of nursing staff per occupied bed as the Australian total (1.6). While the ratio for New South Wales, Victoria and Tasmania, Northern Territory and Australian Capital Territory combined was higher at 1.7. Queensland had the lowest ratio of 1.5 nursing staff per occupied bed.

In 2005-06, the average number of total staff per occupied bed was 2.5. Western Australia and Victoria had the highest average number of total staff per occupied bed, 2.7. Queensland had the lowest average number of total staff per bed at 2.3.

INCOME

Income received by private acute and psychiatric hospitals in Australia during 2005–06 amounted to $6,591.1m, an increase of 5.5% over the previous year. Over the five years to 2005–06, the average annual increase in income was 7.9%.

Patient revenue accounted for 96% of all income generated by private acute and psychiatric hospitals in 2005–06. Patient revenue as a proportion of total revenue was highest in South Australia (97%) and lowest in Western Australia (94%).

When income is adjusted to remove the effects of price changes over the period, the average annual growth over the five years to 2005-06 was 4.1%. The increase from 2004-05 was 1.1%, which represents a continuation of the slowdown in growth in recent years. Acute and psychiatric hospitals experienced strong growth in adjusted income in 2001-02 (8.7%). The growth slowed in 2002-03 (4.1%) and 2004-05 (1.6%). (See Explanatory Notes paragraph 16, concerning the use of chain volume measures.)

Acute and Psychiatric Private Hospitals, Income and Expenditure

EXPENDITURE

Recurrent expenditure for acute and psychiatric hospitals during 2005–06 amounted to $6,160m, a 5.5% increase over the previous year.

For private acute and psychiatric hospitals, wages and salaries (including on-costs such as employer contributions to superannuation and payroll tax), as a proportion of recurrent expenditure was 52% in 2005–06 compared with 51% in 2004–05. This proportion has continued to decrease from 59% in 1995–96. Other large components were drug, medical and surgical supplies (26% of the total) and administrative expenses (7.2%).

The average expenditure per patient day in 2005–06 was $894 compared with $859 in 2004–05. These average costs have increased from $483 in 1995–96.

The average cost per patient day is higher as hospital size increases. This is a reflection of the greater complexity of procedures undertaken at the larger hospitals. The more complex procedures necessitate greater use of highly trained staff, expensive equipment, drugs and medical supplies. In 2005–06, recurrent expenditure per patient day at private acute and psychiatric hospitals with over 200 beds was $1060, compared with the average of $575 for hospitals with 25 or fewer beds.

There are also considerable differences in the average recurrent expenditure per patient day among the various hospital types. Religious or charitable hospitals had the highest average costs per patient day ($1008) in 2005–06. Other non-profit hospitals and hospitals operated for profit had lower average costs per patient day ($836 and $812 respectively).

Over the five years to 2005–06, the average annual increase in recurrent expenditure was 3.8% (adjusted for price changes over the period). (See Explanatory Notes, paragraph 16, concerning the use of chain volume measures.)

Gross capital expenditure for private acute and psychiatric hospitals during 2005–06 increased by 20% over the previous year to $370.1m.

Capital Expenditure is volatile in the Private Health sector due to the exceptional nature of such expenditure. Significant purchases or construction undertaken in any given year are unlikely to be repeated for some time. Figures for 2005-06 show a return to expected levels following low levels of expenditure during the past three years.

Capital expenditure in 2005–06 represented 5.6% of the total income for the year. Amongst the states and territories, capital expenditure as a proportion of total income was highest for Tasmania, Northern Territory, and Australian Capital Territory combined (16%) and lowest for South Australia (2.3%).

FREE-STANDING HOSPITAL FACILITIES COMMENTARY

HOSPITALS

The number of private free-standing day hospital facilities has grown fairly steadily in the last ten years from 140 establishments in 1995-96 to 256 in 2005-06. The largest increase of all the states and territories was in Queensland, with 4 more hospitals than in 2004–05. The number of beds/chairs in private free-standing day hospital facilities increased by 1.7% from 2004-05, from 2,078 to 2,114, with an average of 274 patient separations per bed/chair. The number of operating theatres increased by 6.1% from 231 to 245 over the year, while the number of procedure rooms rose by 3.6% to 200 rooms.

The four main types of free-standing day hospitals in 2005–06 were specialist endoscopy (28%), opthalmic (22%), plastic/cosmetic (13%) and general (6.6%). Specialist endoscopy centres had the highest number of patient separations with 188,707 in 2005–06 followed by ophthalmic centres with 99,046.

Patient separations

Patient separations from free-standing day hospital facilities continued to increase from 537,518 in 2004–05 to 579,907 in 2005–06, representing an increase of 7.9%. The average annual growth rate for the five years ending 2005–06 was 8.1%.

Staff

The total number of full-time equivalent staff in free-standing day hospital facilities increased by 7.0% to 2,231 in 2005–06. Nursing staff accounted for 62% of total staff in 2005–06, a proportional increase of (1.5%) from 2004–05.

INCOME

Free-standing day hospital facilities received $410.0m in income during 2005–06, a 9.2% increase from the previous year. The average annual increase in income over the five years to 2005–06 was 13%.

Most income generated in free-standing day hospitals is sourced from patient revenue (96%), as distinct from income derived from other sources such as investments and bequests. This proportion was highest for Tasmania, Northern Territory and Australian Capital Territory combined (99%) and lowest for Victoria (94%).

In adjusted terms, income increased by 4.7% from 2004-05 and the average annual increase in income was 8.9% over the five years to 2005-06. (See Explanatory Notes, paragraph 16, concerning the use of chain volume measures to adjust income and expenditure.)

Private Free-Standing Day Hospital Facilities, Income and Expenditure

EXPENDITURE
Recurrent expenditure recorded for free-standing day hospital facilities in 2005–06 was $338.4m. This represents an increase of 11% over the previous year. The average expenditure per patient separation continued to increase from $568 in 2004–05 to $584 in 2005–06.

In adjusted terms, the average expenditure per patient separation in 2005-06 decreased by 1.4% over the previous year. While the average annual increase in expenditure per patient separation was 1.0% over the five years to 2005-06. (See Explanatory Notes, paragraph 16, concerning the use of chain volume measures to adjust income and expenditure.)

When adjusted for price changes, recurrent expenditure increased by 6.3% which was 4.6% lower than the non-adjusted figure. The average annual growth rate was 9.1% over the five year period to 2005–06.

Gross capital expenditure for free-standing day hospital facilities during 2005–06 was $17.2m. Capital expenditure represented 4.2% of total income in 2005–06. This proportion was highest for Western Australia (6.7%) and lowest for South Australia (1.6%).

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